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The Apple TV may be about to graduate from a "hobby" project into a world-beater, if leaked info that's reached Engagdet proves true. It's set to rival Google's TV offering, and will see Apple embrace cloud-based content streaming for the first time.

Engadget got a tip from persons unknown, and called on a contact "very close" to Apple who's confirmed it: The next Apple TV is going to be awesome. Why do we know this? Because the data in the leak reveals that the Apple TV2 will be ditching the clunky local hard-drive/iTunes synch and OS X lite architecture, and instead will be leveraging Apple's new runaway success OS—iPhone OS. Specifically it'll be running on a version of iPhone 4. The killer aspect of this choice is that this means many iPhone apps will probably work well on the platform right from the get-go, and like it's done for the iPad, Apple may allow specific Apple TV apps to be written.

Even more surprising than this, the leak suggests the new hardware, which will run on the same A4 chip as the iPad, and be full HDTV compatible, will have a mere 16GB of Flash storage aboard. The rest of the content storage will be in the cloud, and will come streamed over the Intertubes to your home's big screen. This implies that all those rumors of a revamp of iTunes to take it into the cloud are true, since it's hard to imagine Apple doing anything other than syncing their newest toy to their successful media hub software. But this has spin-off implications for music and movie streaming to your iPad and iPhone too.

Essentially this is the hot, fresh blood injection that the ailing and aging Apple TV system needs to keep it relevant. And with news that Google's got its own TV hardware on the way, it's about the only thing Apple could do to compete. They've even thrown caution to the wind and done something may people will say is "un-Appley" and pegged this new ATV unit at just $99, which will surely get many millions of consumers interested.

Or will it? Is the average Joe Public ready for the onslaught of Net-based media that's imminent? Does the typical man in the street care if his or her next edition of Top Chef or Glee comes over a cable, over broadband to a Google box, or to a cloud-based iTunes, where it's served to the TV? It's hard to say. The big advantage of these systems over normal cable or satellite TV, or even TiVo is that the content is always available on demand—you don't have to remember to record anything.

The big thing Apple does have to its advantage is its massive PR halo, gained from the wild success of the iPhone and iPad—this name and a low price may get Joe all excited to buy into the glossy Apple ecosystem. Joe Public may even be intrigued by the idea that he could play games on his TV without having to buy an expensive games console (which then makes us think: Apple motion-sensor games controllers?). Apple may also be able to leverage this business angle to finalize those tricky negotiations with those difficult TV networks, to make available the right kind of on-demand content. And Joe Public may think twice about buying Google hardware, as it's not a name you're used to seeing silk-screened onto real-world hardware—it's a search engine on the Inter-thingy, isn't it?

There's one question left though: Why is this a "Today's Vision of Tomorrow" piece? Because Engadget's tip noted that the new TV won't be revealed at the upcoming WWDC conference. It'll happen later in the year, probably as a special event. And before then Apple's got to get all its next-gen iPhone ducks in row. So we're not sure exactly when the hardware will go on sale (assuming all of the above is true).

To keep up with this news follow me, Kit Eaton, on Twitter. That QR code on the left will take your smartphone to my Twitter feed too.

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